Mounting pressure on canola as futures weaker

WINNIPEG, (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were weaker Friday, as increased pressure from products and the Canadian dollar weighed on values.

A Winnipeg-based trader explained product values over the last two days have dropped by more than C$12 and that’s at least twice the amount canola bids have slipped. He stated the mounting pressure could push canola further downward.

Meanwhile, the Canadian dollar has continued to make its way upward. By mid-afternoon Friday the loonie reached 75.94 U.S. cents, which made canola less attractive to buyers.

Statistics Canada released its report on grain stocks as of July 31 and the agency’s estimate for canola fell within market expectations of 3.8 million to 3.9 million tonnes. The report said total canola stocks were 3.873 million tonnes, for an increase of almost 55 per cent to the same time last year. Also, the July 31, 2019 stocks were nearly 68.2 per cent above the five-year average.

There were 15,417 contracts traded on Friday, which compares with Thursday when 14,873 contracts changed hands. Spreading accounted for 6,984 contracts traded.

Settlement prices are in Canadian dollars per metric tonne.

Price Change
Canola Nov 442.80 dn 2.50
Jan 450.70 dn 2.50
Mar 457.80 dn 2.20
May 464.10 dn 2.10

SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Friday, largely due to good weather in the United States for crops to mature.

The U.S. Department of Agriculture (USDA) released its weekly export sales report today. For the week ended August 29, old crop soybeans came in at 69,400 tonnes and well below market expectations. New crop soybeans reached 788,400 tonnes, which exceeded expectations.

Soymeal export sales were 68,500 tonnes for old crop and 158,600 tonnes for new crop. Soyoil registered 3,100 tonnes of old crop and 9,500 tonnes of new crop.
Soybean exports were almost 1.197 million tonnes, up 37 per cent from the previous week and with 780,400 tonnes destined for China. Soymeal shipments came to 261,900 tonnes, up 11 per cent. Soyoil exports were 17,600 tonnes and noticeably up from last week.

IEG Vantage, formerly Informa, estimated the 2019 U.S. soybean crop to produce 48.4 bushels per acre, up 0.2 BPA from their previous estimate.

CORN futures were weaker on Friday with position squaring ahead of the weekend.

The export sales report indicated old crop corn incurred a net reduction of 165,900 tonnes, which was far below trade predictions. At 416,700 tonnes new crop corn was a little below market forecasts. Exports amounted to 382,000 tonnes for a drop of 38 per cent from last week.

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U.S. President Donald Trump was scheduled to meet today with officials from USDA and the Energy Information Administration to discuss biofuel proposals. Trump has been under fire from the biofuel industry that has seen more than 15 plants close or cut production. This came after the president recently handed out nearly 40 waivers to the oil industry to allow them to reduce the amount of biofuel they’re required to mix with gasoline.

IEG Vantage estimated this year’s U.S. corn crop to reap 169.6 BPA. That’s an increase of almost two BPA from their previous projection.

WHEAT futures were steady to lower on Friday, with a half cent loss for Kansas City wheat and larger declines for Chicago and Minneapolis wheat.

The USDA reported wheat sales were 321,100 tonnes, a drop of 53 per cent compared to the previous week and below trade expectations. Exports were 558,900 tonnes and up 27 per cent from the previous week.

Earlier today, Statistics Canada released its report for grain stocks as of July 31. Total wheat stocks in Canada were estimated at 6.184 million tonnes, down 295,000 tonnes compared to the same time last year, and more than 1 million tonnes below the five-year average.

Also, Statistics Canada noted in the report that durum stocks stood at 1.619 million tonnes. That’s above the 1.426 million tonnes last year and the five-year average of 1.414 million.

 

OUTSIDE MARKETS

Light crude oil nearby futures in New York was up 22 cents at US$56.52 per barrel.

In the afternoon, the Canadian dollar was trading around US75.91 cents, up from 75.60 cents the previous trading day. The U.S. dollar was C$1.3174.

 

Winnipeg ICE Futures Canada dollars per tonne.

Canola Nov 19 442.80s -2.50 -0.56%

Canola Jan 20 450.70s -2.50 -0.55%

Canola Mar 20 457.80s -2.20 -0.48%

Canola May 20 464.10s -2.10 -0.45%

Canola Jul 20 470.20s -2.00 -0.42%

 

American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound. Prices are displayed with fractions (2/8, 4/8, and 6/8) instead of decimals. -2 equals .25, -4 equals .50, -6 equals .75. The “s” means it is the settlement.

 

Chicago

Soybean Sep 19 845-0s -4-6 -0.56%

Soybean Nov 19 857-6s -3-6 -0.44%

Soybean Jan 20 872-0s -3-4 -0.40%

Soybean Mar 20 886-0s -2-6 -0.31%

Soybean May 20 897-4s -2-2 -0.25%

 

Soybean Meal Sep 19 287.2s -1.5 -0.52%

Soybean Meal Oct 19 289.3s -1.4 -0.48%

Soybean Meal Dec 19 293.0s -1.5 -0.51%

 

Soybean Oil Sep 19 28.48s +0.01 +0.04%

Soybean Oil Oct 19 28.46s unch unch

Soybean Oil Dec 19 28.65s +0.01 +0.03%

 

Corn Sep 19 342-4s -4-0 -1.15%

Corn Dec 19 355-4s -3-2 -0.91%

Corn Mar 20 368-6s -3-0 -0.81%

Corn May 20 377-4s -3-2 -0.85%

Corn Jul 20 384-6s -3-0 -0.77%

 

Oats Sep 19 276-2s +1-2 +0.45%

Oats Dec 19 269-0s +1-2 +0.47%

Oats Mar 20 270-4s +0-6 +0.28%

Oats May 20 269-0s +0-4 +0.19%

Oats Jul 20 269-4s -0-2 -0.09%

 

Wheat Sep 19 460-2s -3-6 -0.81%

Wheat Dec 19 463-6s -2-4 -0.54%

Wheat Mar 20 470-4s -2-0 -0.42%

Wheat May 20 475-6s -1-2 -0.26%

Wheat Jul 20 479-0s -1-0 -0.21%

 

Minneapolis

Spring Wheat Sep 19 474-6s -9-6 -2.01%

Spring Wheat Dec 19 494-2s -7-6 -1.54%

Spring Wheat Mar 20 509-0s -6-4 -1.26%

Spring Wheat May 20 520-2s -5-6 -1.09%

Spring Wheat Jul 20 531-0s -5-6 -1.07%

 

Kansas City

Hard Red Wheat Sep 19 375-2s -6-6 -1.77%

Hard Red Wheat Dec 19 393-2s -0-4 -0.13%

Hard Red Wheat Mar 20 408-0s +0-4 +0.12%

Hard Red Wheat May 20 418-4s +1-4 +0.36%

Hard Red Wheat Jul 20 427-6s +2-0 +0.47%

 

Chicago livestock futures in US¢/pound, Pit trade

Live Cattle Oct 19 94.875s -3.000 -3.07%

Live Cattle Dec 19 99.750s -2.475 -2.42%

Live Cattle Feb 20 106.400s -2.000 -1.85%

 

Feeder Cattle Sep 19 133.350s -1.050 -0.78%

Feeder Cattle Oct 19 130.900s -1.425 -1.08%

Feeder Cattle Nov 19 130.375s -1.200 -0.91%

 

Lean Hogs Oct 19 63.500s -2.800 -4.22%

Lean Hogs Dec 19 62.475s -3.000 -4.58%

Lean Hogs Feb 20 70.850s -3.000 -4.06%

 

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